Munis were especially hard-hit by the rise in long-term Treasury yields because tax-exempt issuers, such as state and local governments, tend to issue more long-term bonds than do corporate issuers.

WSJ: Tax-Cut Deal Results in Turmoil for Bonds

Ms. Whitney forecast that a few hundred issuers of tax-exempt bonds will default on their bonds over the next several years.

FORBES: Municipal Bond Closed-End Funds Attractive

Then there are tax-exempt issues available from tens of thousands of issuers.

FORBES: Yield Booster